Only had a few different settings then what calypto had:
Maximum pre-renderedframes: I had Use 3d application settings
Power management Mode: I had optimal power
Shader Cache: I had it off
Texture filtering-An-isotropic sample optimization: I had it off

Either way I'm still experiencing long delays in selecting actors/bsp. So I'm going to uninstall drivers again and go to the oldest driver available on nvidia site that is WHQL (the current version I'm using is WHQL as well). If rolling back to an old driver doesn't work, I'll try reinstalling unreal and if no joy there guess its a full system reinstall.

Edit:
-Just did fresh install of oldest stable driver available on nvidia and no joy.
-Also did fresh install of ut2004 and only changed res and removed reducemouselag and mouse smoothing. Still no joy.

Bet it works under windows 7 though, do you have another machine you can use just for editing to avoid zapping everything just for this to work, I don't think I'd want to do a complete rebuild just for 1 task if everything else is running ok.

Bet it works under windows 7 though, do you have another machine you can use just for editing to avoid zapping everything just for this to work, I don't think I'd want to do a complete rebuild just for 1 task if everything else is running ok.

I just set up this computer no less then a month ago, so doing a fresh reinstall now is fast and easy. Which I'm already half way done.

After install of windows 7 with all drivers installed and nvidia drivers(including geforce experience) I can now select things in editor with little(1 to 2 second delay when zoomed all the way out looking at many objects) to no delay(when zoomed in a reasonable distance). Thanks for all the support in helping me solve this problem or at least hearing me out as I went through all the steps to get to this solution. Hopefully this will help others that may be suffering from same or similar problems. Now I can start level editing at a much faster rate.